April 2006 Newsletter Final by SJ8TL9


									April 2006 Newsletter

In This Issue                                   From the President’s Desk
 From the President’s Desk
 Costco Wins Lawsuit –        April was a busy month for WineAmerica in several key policy areas. The
  Repercussions for            following article outlines our progress. As the wine industry continues to grow at
                               both the state and federal level, it is increasingly important that we work toward
  Distribution System
                               common goals and clarify our stances on critical issues.
 Legislative Update: Direct   Policy Statement
  Shipping & Self-
  Distribution                 In the last month, the Executive Committee produced an important policy
                               statement governing WineAmerica’s position on possible compromises for states
 Tend Alert: Wineries Are     facing legislative challenges to their ability to market wines. Many challenges
  Increasingly Charging        currently exist as plaintiff’s attorneys have been very aggressive in filing suits
  Customers for Tastings       and state legislatures have had to wrestle with the implications of the Granholm
                               and Costco decisions. The Executive Committee product, “WineAmerica’s
 Online Dues Renewal          Position on Size Limitations,” should be read in conjunction with the Board’s
  Available; New Member’s      recently revised statement on the need for wineries to have reasonable, effective
  Only Website                 and cost efficient marketing channels for their wine. These documents lay out
                               both the need to preserve winery marketing capabilities and articulate that it is in
 Legislative Library –        not in the public’s interest for size limitations to be applied to laws governing the
  Unique VA Law Model for      direct shipment of wine.
  Other States
                               As a fairly large number of states will address the issues of direct shipment and
 Upcoming TTB Seminars        self-distribution in early 2007, these policy statements of WineAmerica should be
                               used for guidance.
 AWS Opens Search for
                               Both statements are available on our website in the Member’s Only
  New Executive Director       section. Log-in and click “Position Papers” in the drop down menu at the
 Welcome to the Newest        top of the page.
  WineAmerica Supplier
                               In April, WineAmerica joined with other groups for the National Grape and Wine
 From the COLA to the         Initiative board meeting in Washington, DC. This meeting brought together
  Shelf: Tips for Getting      industry and extension people from several states to evaluate the state of
  Your Labels Approved and     national grape research. They also focused on building strategy for improving
  Out the Door                 the prospects for additional targeted research and extension funding necessary
                               to improve the competitive position of grape growers and processors, including
 WineAmerica Staff            table, wine and raisin grapes. While there are no easy answers, a solid
  Contacts                     foundation has been built for cooperation with USDA and other Federal agencies
                               and for lobbying Congress to provide additional support for grape relegated
 Advertising
                               research. In the short term, the primary areas where NGWI is seeking to expand
                               research are for 1) clean plants, 2) nutritional benefits of grapes, 3) improving
                               available plant materials, and 4) working on sustainable approaches to waste
                               water. Several requests were made for additional Congressional funding in this
                               cycle and we will shortly know the results of those requests. We will keep you
                               updated as support for NGWI grows and specific needs are met.
Important Links                  Costco Wins Lawsuit – Repercussions for
Click above to go directly to
                                          Distribution System
WineAmerica’s homepage                     st
                                On July 21 , Judge Pechman brought the three-year Costco trial to a close by
WineAmerica Supplier            handing down a ruling largely favoring Costco’s claims that Washington State
Membership Webpage              alcohol regulations violated anti-trust laws and restricted competition.
Click above to view a
complete list of WineAmerica    Judge Pechman dismissed the Washington State Liquor Control Board’s
Supplier Members                argument that the state’s rules governing distribution were justified under the
                                Twenty-first Amendment (gives states the right to regulate alcohol laws to
Alcohol Tobacco Tax &           promote temperance, orderly markets and collect revenue). The state’s
                                regulations were found to satisfy none of these conditions. Therefore, the state
Trade Bureau (TTB)
Click above to view the TTB     can no longer enforce several provisions, including:
homepage                                  10% minimum markup
                                          Ban on high volume discounts and credit sales to retailers
Supplier Virtual Trade                    Ban on central warehousing
Show                                      30-day hold on price-posting
Click above to view the                   Require wholesalers to charge uniform prices to retailers
programs & discounts offered
by WineAmerica’s Supplier       The ruling overturns a majority of the rules governing Washington’s distribution
Members                         system. The state has 30 days to appeal the decision or for the legislature to act
                                – Judge Pechman stayed her decision until that time. If the state does not
WineAmerica                     appeal, the Washington Beer & Wine Wholesalers Association, an intervener
Trailblazers                    defendant, can appeal the decision. It is likely that will happen and it is possible
Click above to view the         that the case could go as high as the Supreme Court. In the meantime,
WineAmerica Trailblazers        wholesaler groups and other state alcohol agencies will be watching to see how
homepage                        Washington handles the outcome of this case.

                                Legislative Update: Direct Shipping & Self-
Contact Us
info@wineamerica.org            Although several states have resolved shipping and distributions issues for the
                                2006 session (sometimes favorably by passing pro-winery legislation, and
                                several unfavorable solutions of eliminating distribution or doing nothing to
                                change archaic laws), there are still a few state legislatures that are working on
                                legislation or have recently passed new laws. Here is the latest update:

                                Arizona – Though one direct shipping bill was recently killed in committee,
                                another one, HB 1276, looks likely to pass next week. The bill allows wineries
                                producing less than 20,000 gallons to ship to consumers and retailers.

                                Colorado – HB 1120 was signed into law in mid-April and goes into effect July
                                1 . The bill repeals the state’s reciprocal law and implements a Direct Shipper’s
                                Permit for in and out-of-state wineries. There are no quantity limits and the fee is
                                likely to be set at $50.

                                Delaware – Unfortunately wineries in DE did not fair as well this session. At the
                                end of April the Governor signed HB 336 into law which eliminates a winery’s
                                right to self-distribute. However, HB 379 creates a “limited wine importer” option
                                for importers selling and delivering less than 1,000 cases per year. The fee for
                                this new permit is $100.

                                Florida – The FL legislature is currently considering three bills that create some
                                system of direct shipment. Two bills, SB 282 & SB 144 create a $100 permit and
                                     have no size caps. Both bills are moving through the Senate. HB 247 also
    WineAmerica Board of             creates a permit, though the fee is $250 and the bill contains a size restriction of
         Directors                   250,000 gallons. That bill has passed the House and moves on to a Senate
Tom Sharko
Alba Vineyard, NJ
Mike Williams                        Hawaii – HB 1968 repeals the state’s reciprocal status and creates a permit bill
Winery at Wilcox, PA                 for direct shipping. The bill has passed both chambers and is currently in a
New York
Dan Damianos
                                     conference committee where details on permit fees and quantity limits are being
Pindar Vineyards                     worked out.
James Finkle
Constellation Brands                 Kansas – SB 297 contains language that would allow wineries to apply for a
Jerry Douglas
                                     direct shipper’s permit for $100. The bill is currently in conference committee,
The Biltmore Company, NC             though it has received support and looks likely to move forward.
Steve Gibson (Chairman)
Habersham Vineyards & Winery, GA     Kentucky – SB 82 was signed into law by the Governor in mid-April. The bill
Great Lakes
David Braganini                      allows wineries producing less than 50,000 gallons annually to ship directly to
(Secretary/Treasurer)                consumers (permit fee $100) after an initial on-site purchase. The new law also
St. Julian Wine Company, MI          creates a small farm winery wholesaler’s license for a $100 permit fee that
Kathleen Oliver                      allows wineries to sell at wholesale from the licensed premises.
Oliver Winery, IN
Thomas J. Held                       Maine – A bill, HB 1341, that had been moving through the legislature that would
Stone Hill Winery, MO                create a direct shipping permit died in committee at the end of the month. It is
Eldon Nygaard                        likely that this issue will come up again in future legislative sessions.
Valiant Vineyards, SD
Rocky Mountain
Ron Bitner                           Maryland – At the end of April, the Governor signed SB 812 into law. The bill
Bitner Vineyards, ID                 creates a limited wholesaler’s license for in and out-of-state wineries producing
Naomi Shepherd Smith                 less than 27,500 gallons annually. The new permit is $50 and is already
Grande River Vineyards, CO
Washington                           available for use.
Craig Leuthold
Maryhill Winery                      Oklahoma – While the bills that would allow for direct shipping died in
Marty Clubb
L'Ecole No. 41 Winery
                                     committee, Oklahoma wineries are still facing a battle over self-distribution.
Oregon                               Wholesalers have filed a lawsuit that challenges an OK law passed in 2001 that
Dick Erath                           gives in-state wineries the ability to self-distribute. The lawsuit is now making its
Erath Vineyards Winery               way through the courts and legislators and wineries are waiting to see the final
Harry Peterson-Nedry
Patrick Campbell                     Texas – Texas wineries are also waiting to see the outcome of another unique
Laurel Glen                          case. Three TX consumers and several California merchants are challenging
Pete Downs (Vice Chairman)
Kendall Jackson Wine Estates, Ltd.
                                     the TX law that gave wineries the right to direct shipment, but neglected to
Herb Schmidt                         extend the same privileges to out-of-state retailers.
Robert Mondavi Winery
Richard Smith                        Vermont – SB 58 continues to make its way through the legislative process.
Paraiso Springs Vineyards
                                     The bill creates a permit for direct shipment ($300 fee, 24 cases per year) and a
Jim Anderson (State Associations     limited wholesaler license ($200 fee, 2,000 gallons per year). The bill has been
Council Chairman)                    getting support from lawmakers and should go to the full Senate for a vote in the
Missouri Grape and Wine Program,     next week.
Jim Ballard
James Arthur Vineyards, NE
Rob Deford
Boordy Vineyards, MD                                       From The Grassroots
Douglas Moorhead
Presque Isle Wine Cellars, PA
Edward O’Keefe, III                  Georgia
Chateau Grand Traverse, MI
Jim Trezise                          Jennifer Montgomery attended the April
New York Wine & Grape Foundation     meeting of the Winegrowers Association of
Lew Parker                           Georgia. It was an opportunity for wineries in
Willowcroft Farm Vineyards, VA
                                     north GA to meet WineAmerica staff in person
                                     and discuss issues of concern, including
                                     immigration, the Farm Bill and TTB user fees.

                                                                                           Blackstock Vineyards & Winery, GA
    WineAmerica Supplier           The new Dean of Agriculture at the University of Georgia (UGA), Scott Angle,
         Members                   joined the group for lunch and took the opportunity to express his commitment to
eSkye Software, LLC
                                   assist the GA wine industry in getting much-needed permanent, tenured
www.eskyesolutions.com             positions in viticulture and enology at the university, as well as supporting the
                                   ongoing effort to make sure that the needs of specialty crops are addressed in
Idology Group, LLC                 the upcoming Farm Bill. Also attending the lunch were other UGA agriculture
                                   faculty and extension agents.
Kendall-Jackson Nursery
www.kj.com                                                        North Carolina
Sell More Wine
www.sellmorewine.com                                              While recently visiting grassroots constituents in
                                                                  Brunswick County, NC, Congressman Mike
Six88 Solutions
                                                                  McIntyre (D-NC) stopped in at Silver Coast
                                                                  Winery in Ocean Isle. While there, he toured the
Apprise Technologies                                              vineyard and entire winemaking facility with
                                                                  winemaker Dana Keeler and winery owner,
Davis Wright Tremaine, LLP                                        Maryann Azzato.
In Short Direct Marketing          Congressman McIntyre is a member of the House Agriculture Committee and
www.inshortmarketing.com           has worked in support of the North Carolina wine industry and Specialty Crop
Inertia Beverage Group             Block Grants.
McDermott Will & Emery             Tennessee
                                   WineAmerica Delegate, Rob Ramsey of Stonehaus Winery in Crossville, TN,
Merrill Lynch                      hosted a fundraiser at the winery for Congressman Lincoln Davis (D-TN) in
                                   March. As member of the House Agriculture Committee, the Congressman has
TradePulse                         been supportive of the TN wine industry and federal legislative efforts to
                                   establish a Specialty Crop Block Grant program.
Advance Packaging Corporation
www.advancepkg.com                 “Wineries have become important economic engines in many parts of rural
American Wines To You, Inc.        America—including Tennessee’s Fourth Congressional District, which is home to
www.americanwines2u.com            the state’s oldest winery. Wineries positively impact an area’s local agricultural
Arton Glass & Ceramic Imprinters   economy, retail economy, and in many cases, they initiate a new tourism-based
www.artonimp.com                   economy that’s impacts are far reaching. I hope we will continue to see growth
Bottle Gnek Inc.                   in all aspects of this industry throughout the great state of Tennessee,” says
www.vinamor.com                    Congressman Davis.
Capital Wine & Spirits

                                       Trend Alert: Wineries Are Increasingly
Cosmo Graphics
Envision, LLC
FedEx-US Marketing
                                         Charging Customers for Tastings
Fine Vine Wines, LLC               According to a Wine Business Monthly survey (May 2006 issue), wineries across
www.finevinewines.com              the US are instituting fees for wine tastings when customers visit the tasting
Hinman & Carmichael, LLP           rooms. Fees generally range from $3-$6, though many fees increase for reserve
www.beveragelaw.com                tastings or sit-down tastings.
La Belle Amie Vineyard & Winery
www.labelleamie.com                The survey also found that smaller wineries (those producing less than 5,000
                                   cases per year) generate most of their sales in the tasting room. On the other
McCandlish Holton PC
www.mccandlishholton.com           hand, larger wineries tend to do more business through wholesalers or overseas
                                   exports. Due to the strength of tasting room sales for most wineries, the survey
MKF Group, LLP                     found that nearly three-quarters of respondents reported that they had an on-site
                                   tasting room at their winery.
Pride Polymers, LLC
The Rawls Group
Valley Global Insurance
Valley Wine Storage
                        Online Dues Renewal Available; New and
Vine Tales, LLC           Improved “Members Only” Section
Virginia's Best       Now you can pay your dues online with WineAmerica’s new Online Dues
                      Renewal System! Simply login to the new and improved “Members Only” section
WinoWorld.com         and select the dues payment option from “Quicklinks,” or click on the button
                      labeled “Pay Dues Online!” This new system will calculate your dues based on
                      gallons sold if you are renewing for a full year membership, or allow you to pay
                      the balance owed if you pay in two installments. It is easy to use, efficient, safe
                      and secure. Please allow 5-7 days after making a payment for your dues status
                      to be changed online.

                      The new and improved “Members Only” section is your one stop personal
                      homepage for all things related to WineAmerica and the wine industry! A new
                      navigation system called “Quicklinks” allows you to enroll in the cost saving
                      programs that affect your bottom line, check the label approval status for your
                      winery, make dues payments online, and access an array of other important
                      information. Items under the “Quicklinks” menu include:
                          -   Label Approval Status
                          -   Online Dues Payment
                          -   Enrollment in the FedEx Program
                          -   Enrollment in the IDlive Program
                          -   Access to Discounted Member Programs
                          -   Participation in the WineAmerica Trailblazers Program
                          -   Key Links to Important Information
                          -   Wine News from Around the World
                          -   The Virtual Label Assistant

                      WineAmerica is very excited to offer these new tools and will continue to add
                      more benefits in the coming months!!! In the meantime, all you need is your
                      username and password to login to the new “Members Only” section. If you
                      need your username and password, please contact Kelly Rusk via email at
                      krusk@wineamerica.org to request your login information.

                      Legislative Library – Unique VA Law Model
                                     for Other States
                      Recently passed legislation by the Virginia General Assembly and signed by the
                      Governor is a good model of pro-winery legislation that seeks to build the state
                      wine industry.

                      HB 1435 deals with special exemption and special use permits and bans
                      localities from adopting requirements for these permits that are more restrictive
                      than previous requirements. The bill also states that no locality can adopt
                      requirements or enforce existing restrictions that prohibit music or personal
                      parties on the property of a farm winery or are restrictive to construction of farm
                      wine facilities.

                      Finally, the bill calls for the Secretary of Agriculture and Forestry to examine the
                      “economic viability of the farm winery industry in Virginia.” The Secretary is
                      charged with assessing a range of issues and making recommendations to the
                      legislature. A portion of this assessment must include an examination of the
                      relationship between farm wineries and the community and the potential for more
                         streamlined permitting processes for marketing activities held on winery

                         Click here to see the entire bill.

                               Upcoming TTB Seminars Around the
Quick Tip:                                Country
** You can access all
of WineAmerica’s
Position Papers in the   Federal Compliance Training in the Northwest Region for the Wine
Member’s Only section    Industry, May 9-23, 2006
of the website – click   Topics include recordkeeping and reports, changes after qualification,
“Position Papers” in
the drop down tab **
                         taxes, labeling and advertising, Pay.gov, alternation vs. custom crush, and
                         wine production and treatment materials. Register today!

                         Formula Seminar in the Washington, DC Metropolitan Area, May 3,
                         Space is limited. An additional seminar may be planned if this one
                         reaches capacity.
                         Are you a producer of beverage alcohol products or non-beverage
                         products and want to know more about how to obtain your formula
                         approval more quickly? Find out how.

                         Arkansas Training: May 11, 2006 – Federal Compliance Training
                         for the Wine Industry

                           American Wine Society Opens Search for
                                  New Executive Director
                         AWS is currently looking for a new Executive Director. The position is posted in
                         the WineAmerica Job Classifieds on the website:
                         www.wineamerica.org/links/classif/Default.cfm. To view the job
                         click on the Employment category once you’ve accessed the Classifieds.

                         The American Wine Society is a non-profit “devoted to educating people on all
                         aspects of wine. Our members include wine novices, experts, grape growers,
                         amateur and professional winemakers, chefs, wine appreciators, wine educators,
                         restaurateurs and anyone wanting to learn more about wine and gastronomy.”

                         AWS would like any interested candidates for the Executive Director position to
                         be sent to them by May 31 . Contact information is included in the attached job
                         description. Also note that the job can be done from any location, so you don’t
                         have to move from your hometown.
     Welcome to the Newest WineAmerica
             Supplier Members
Merrill Lynch
Towson, MD
Merrill Lynch provides financial services to WineAmerica members. To learn
more about what Merrill Lynch can do for your winery, click on this link for the
winery specialists: www.fa.ml.com/JPM

Six88 Solutions – Ship Compliant Software
Boulder, CO
ShipCompliant is the industry’s first online direct shipping compliance
management solution. This web-based software tool allows a winery to easily
manage the overwhelming and constantly changing environment of direct
shipping legislation. Manage your compliance status, run comprehensive
compliance checks on orders, and generate "sign and send" state shipping and
excise tax reports at www.shipcompliant.com.

                From the COLA to the Shelf
Tips for getting your labels approved and
               out the door
If not approached correctly, the TTB label approval process can be a frustrating
endeavor. Listed below are suggestions to help better prepare your applications
for approval. These tips have been compiled to reflect common mistakes and

       When printing your COLA applications, please ensure that they are the
        correct size, printed on legal sized paper with the bottom bar at the
        bottom of the page, and that the text is not reduced on the form.
       If you are using a fanciful name, do not include the grape variety or the
        classification of the wine in the fanciful name box.
       If the word “Blend” appears on your front label (i.e. Winemaker’s Blend),
        the blended varietals, along with their relevant percentages (adding up
        to 100%), must also appear on that front label.
       Be sure that your winery trade name and location, which appear in the
        “bottled by” statement, appear exactly as they do in Item 7 on the COLA
        application (name and address of permit) and on your basic permit. Be
        sure to include “Inc”, “LLC”, “Ltd”, or others that apply.
       Any statement of aging in oak appearing on the front label must be
        accompanied by a specific statement of duration aged. (i.e. Aged in
        American Oak “for 6 months”)
       Revisions to Approved Labels: Remember to check on page 3, section
        “V.” of the COLA application for specific instructions on “Allowable
        Revisions to Approved Labels” which do not require a new COLA.
       For all wines that have ingredients added to them, such as flavorings,
        spices, or other juices, a formula must be approved by the TTB prior to
        label approval. Allow plenty of time for this process.
       The range for Table Wine is 7%-14%; wines that have an alcohol
        content outside of this range may not use Table Wine as either the
        Class/Type Designation or as the alcohol content statement.
       Red, White, and Blush to not satisfy the class requirement. They must
        instead read, “Red Wine”, “White Wine”, or, as in the case of a Blush or
        Rose, either “Rose Wine” or “Pink Wine.”
       If you plan on sending your label images via e-mail and your COLA
        applications through the mail, please let the label specialist know
       Review your labels from the beginning. Fewer errors at the start equate
        to fewer delays, and therefore less worry, throughout the process.
       Contact Jim Gore, Wine America’s Label Compliance Specialist, with
        any questions at labels@wineamerica.org or (202)783-2756.

                  WineAmerica Staff Contacts
Bill Nelson, President
Kelly Rusk, Director of Operations & International Affairs
Jennifer Montgomery, Director of Grassroots & Political Affairs
Jenny Mattingley, Director of Communications & Membership Services
Jim Gore, Label Compliance Specialist

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